This handbook, in two parts, constitutes a manual prepared by the American Federation of Teachers, for improving teachers' use of standardized tests. Part I outlines basic concepts and issues surrounding standardized testing for teachers, parents and school administrators. The terms norm-referenced tests, criterion referenced tests, minimum competency tests, achievement and aptitude tests are defined and explained, then followed by a section regarding test selection, in which the aspects of test validity and reliability are introduced. The next chapter, concerned with test interpretation, discusses how scores and various types of derived scores commonly used to report test results, how they are derived, and cautions to be considered in their use. Applications of standardized tests to instructional planning, placement decisions, diagnosis of student needs, and the evaluation of instructional programs are also discussed. Finally, basic premises contributing to the proper use of tests are reviewed. Appendixes include lists of available tests, test publishers, and reference materials which review tests. Part 2 presents a hypothetical school district and two exercises in test selection, score analysis and presentation of same to interested parties. (AEF)